The question underlying this whole post is what will mobile in the deal space really become, if anything, and, who will control it?

Mobile doesn't work like the web. Today, I spoke with KimaLabs, ex-Amazon guys and makers of some cool mobile commerce apps. They've been thinking about and operating in mobile a lot longer than I have and explained that mobile is a much more ADD user experience. It's all about short bursts of attention. You're competing with life much more when on a mobile device...or at least Angry Birds or its equivalent. It's also a very browsing oriented medium not search oriented. More scrolling, swiping, and pinching, less typing.

The same things that make mobile different from the web in theory make it quite well suited for the deal space. Deals are impulse decisions. They aren't the product of searches, and they are very local. The issue is the psychology. Deals work so well on email because it's a captive audience. It's why branding works so well on TV. It's about how it is received. (Email also means easy access to a deal you might want but don't want that second.) Flash sales like Gilt can work on mobile because the threat of losing an item means people will buy from any connected device. Deals are time based but not scarcity of quantity based. Nor are they on the whole so overwhelmingly compelling to stop what you might be doing to buy just because you saw the deal on your phone.

Search has been the been first iteration of mobile deals. Groupon helped conceptualize the process with their interface that makes sense - Eat Something, Go Out, Get Pampered. The problem? The deals and the behavior.

1. The Deals - Evergreen vs. PerishableThe mobile deal landscape on the major players still kind of sucks. The holy grail are temporary deals that help attract users when merchants need them. That problem either requires great integration (OpenTable knowing availability) or lots of effort on the merchant to upload and activate. Deal sites don't have the first and merchants don't have a lot of the latter. What we see instead are evergreen deals that merchants don't mind showing at any time, but they don't bolster the "now" vision. Examples are those that Mobile Spinach offers - easy to consumer deals that don't ever expire, e.g, $3 for $6.

2. The BehaviorI'm no expert on mobile, but I like to watch people. When do they use their phone a lot? I'm hooked on Google Maps, but that doesn't seem to be the majority. When looking at Twitter, Foursquare, Instagram, Facebook, and even Email we see the problem.

Deals on mobile are not social - the space is called group buying, not social shopping; you don't need friends or feel compelled to share with friends. They don't make you want to broadcast. They apps don't compel you to open them as part of your behavior.

Deals on mobile are not games - browsing feeds is fun and passes the time well; scrolling for deals, not so much. As is the case with not being social, you just have limited reason to open up a deal app; you don't check-in on it; you don't get rewarded for using them; you don't get hooked on the crack.

You don't need both, but you do need at least one.

Is All Hope Lost?No, but as a direct response business (local discounting), they still need a reason to message their consumers. That's not there yet in mobile. We could see a world with great push messages based on location, interests, and other social / geo data. Not now, though.

My advice from the cheap seats, help those apps with touchpoints to consumers monetize better as you, the big deal sites have the merchants. For now, though, don't try to be the vertically integrated play in mobile. Treat mobile like the international space. Watch others, learn from the data you see, then, buy the better ones.

<plug> Like this stuff? Then, I hope you'll join us at Daily Deal Summit West. (Should this plug have a discount?) </plug>

Addressing the obvious unspoken question first - I have an absolute positive bias towards the deal space. I do run the daily deal conference, so were it to die as some of its more vocal critics would prefer, that would put a crimp in my plans for marketing technology event domination. It will die though... in its current iteration at least.

The deal space today is a direct marketing machine. That's part of its problem and yet one of the reasons I love it so. The get email send offers has been referred to as the blunt instrument approach, so it will need to be fine tuned if it is to continue. Otherwise, it will turn into the yellowpages business - big but dying.

All of local advertising looks to drive people in stores. Discounting isn't new. Local coupons aren't new. Using the web to drive a local merchant thousands of customers on a performance basis is new. The scale and speed with which Groupon and now LivingSocial have achieved this warrants the attention the space has received. As Jim Moran of Yipit told me, national brands may leverage the space, but influencing local dollars is what has people up at night. It's why Online to Offline or O2O as Alex Rampell coined is, if not a trillion dollar industry, a multi-billion dollar one.

ROIHere is what the big guys all get. Namely, that if they take a dollar out of a merchant's pocket and don’t give them back $1+ back, they will fail in the long-term. This is where we are today. You can't get merchants to spend more than a billion dollars with limited accountability and not have quesitons raised. But, as a deal's business, do you wait for the merchant's level of sophistication to increase before taking their money or do take their money and try to balance their needs and your own. Google is a case study in the latter. If they let only savvy marketers spend money so that no one could lose money, they wouldn't be where they are today. If a company is taking advantage of merchants and/or creating a system where that is possible, that is unacceptable. But, it would not be unsurprising to hear of examples in our revenue driven world.

The Future of The Deal SpaceThe deal space is really a collection of spaces. It started with the just the web, or more specifically email. It was and still is primarily a broadcast approach with little targeting or specificity. Were it start any other way, though, we wouldn't see such scale in one particular company. The web deal space will be like search, dominated by a handful of players. Groupon and Living Social will stay the winners, but how large will they be of the total market when it continues to expand is up for the debate. A friend told me about a conversation he overheard where one executive outside the deal space predicted Groupon would be the MySpace of the sector. It's not that the sector is all bad only that certain tactics are not sustainable.

Mobile, other connected devices, and unexplored touch points are going to be different. As an example, Groupon's email list and sales force don't make it an odds on favorite to win mobile. They are also why a company like American Express can so quickly and easily disrupt the ecosystem if they really chose to do so. I wish I could recall which executive I spoke to in order to give him credit, but he explained that mobile will not be a winner take all or most environment. In mobile, we will see many niche apps becoming meaningful players. People aren't necessarily looking for deals when on their phone. They are doing other behaviors that enable the showcasing of deals. It is why foursquare and twitter are (still) meaningful, and it's also why Google should become the leader in this space.

Innovations in customer acquisition. That's where the deal space falls. It's not about daily, and it's not about deals. It's about connecting buyers and sellers in ways that leverage connected devices to create scale.